All Forum Posts by: Bonnie Low

@Dan Heuschele - my son works for a contractor in San Diego that is focusing heavily on building ADUs in and around San Diego. They are seeing huge demand. I don't know that it's equating to a higher selling price, though, as some other posts have said. I think what's driving it is the high cost of housing, lack of affordable housing, the ability to rent out the units as a STR for side income, and of course the extra space to move family members onto the property. So it's driving value, but not necessarily resale value.

My husband and I have always been interested in real estate. When we were just dating we'd drive around the countryside on weekends looking for property! But back then, there weren't many sources of information. This lack of information led to some limiting beliefs. Like I believed you had to have money (and lots of it) to buy real estate. So therefore I thought you had to have a job with a big salary (which neither of us had back then). I thought you had to have a FICO score in the excellent range (which seemed unattainable). And I didn't know there were so many options for ways to invest. The idea of partnerships never crossed my mind. So I would say the biggest obstacle was lack of information. Thankfully, this shouldn't be a problem for anyone nowadays - especially not for anyone on this site!

@Christina L. - I know it's the million dollar question to be asking what the market is going to do in the next 3, 6, 12 months but I'm not seeing anyone who thinks it's going to tank. We're living in unprecedented times where it's getting harder to project the future based on historic performance. But to my way of thinking a) real estate is not in a bubble like it was in 2007-8  b) housing stock is still not keeping pace with demand and that won't change quickly c) rents don't typically crash as sharply as appreciation adjusts downward - in fact, there can be a higher demand for rentals if home buying contracts and d) it looks like you've got a cash flow cushion to cover your expenses on this property. Like @SarahBrown suggested, it could (and probably will) keep going up. If you have the money and the deal makes sense, I'd buy now!

Your contractor should provide ALL the tools. If they don't have them, you have to wonder how experienced they actually are. That would be like taking your car to the mechanic and having them tell you they're going to need you to provide a socket wrench....as for materials, we DO sometimes buy the materials, but always discuss it first with the contractor so it's clear who is providing what. We do this for a couple of reasons: we either want something very specific, or we have leftover material from a previous project that we want to use in a new one, or we have a discount of some kind, and lastly because contractors often charge markup if they have to shop for you, which makes sense because you're paying for their time.

I would not get into this deal with Logan. Once he moves in, what's going to assure he gets the work done? If it's in good enough shape that it can be occupied, he probably has little incentive to get it done and will instead use his time to work on jobs that he's getting paid for. It's hard enough to get contractors to finish the work according to your scope as it is, but if he's in the property and you don't have free access to it, even if he does the work it might not be done how you wanted. Are you going to be able to inspect it? You need to know the work is done and done right so you can get the appraisal for your BRRRR. It can also be hard to get an appraiser on the inside once you have a tenant in the property. It's just a bunch of red flags for me and I would not do it. Unfortunately, you eliminated your leverage with the original contractor by paying him everything already. He's already proven he's not going to perform for you so you probably just need to take your lumps and pay someone else to finish it.

Looks great! Do you have any trouble getting homeowners insurance on a property that has been hit by a hurricane previously? We're seeing insurers trying to drop homeowners in CA because of the wildfires. 

How long has your property manager been trying to get a tenant in your property? Where we're at the housing inventory is almost non existent so there just aren't vacancies. If your area is like that, if you've found the next deal and are as well capitalized as you mentioned, I'd be moving forward. 

It's hard to say without seeing the space. Lighting can make a real impact for not too much expense. It also enhances safety. I don't know if it would go with the design of your building, but you can upgrade the paint on the stairs by painting the treads and risers in a contrasting color. Maybe put new house or unit numbers on the doors or front of the units? That's also a small expense. Fresh coat of paint on the front doors. 

Why are you not ready to do a BRRRR? Is it the BRRRR method specifically, or are you afraid to buy a home, period? I understand it can be frightening to try to figure out what your repair costs are going to be for a BRRRR. But, really, that's the only thing that makes it different than just buying a house and eventually doing a refi to pull out some of your equity. Use the calculator tools here on BP to do your analysis. Read J Scott's book on estimating rehab costs. Find another investor who will let you tag along when they do walk throughs and find out how they estimate costs. Spend some time at your local builder's supply pricing materials. Meet some contractors and the trades you're like to need: roofing, drywall, HVAC, electrical, plumbers, tile. Go to Home Depot and price out kitchen cabinets and counter tops even if you don't have a house under contract - they offer free design service. It gives you the chance to get a feel for the process you'll go through on a rehab. Find another investors who is doing BRRRS and see if they'll let you do a through walk throughs with them to see how they run their numbers in exchange for doing something for them. I would gladly let someone do a walk through with us if they would enter all my receipts into Quickbooks, lol!

 But absolutely do NOT throw your savings away on a course. It's just not that complicated. That's a good chunk of money that could go a long way either towards your down payment or your repair costs and, frankly, you're probably not going to feel any more confident after taking a course than you do now. You'll just have less money to work with. You CAN do this!

Most candidates are only marginally effective implementing their campaign ideas. Biden is likely going to inherit a split Congress so his ability to make substantive changes is probably going to be hindered. Plus, I believe most members of Congress benefit too much themselves from RE laws and RE-friendly tax laws to have any incentive to make it harder for investors. I wouldn't wait if you find a deal that makes sense now. You'll drive yourself mad trying to second guess what's going to happen in the future and ultimately will be in a place of analysis paralysis. You're either ready to jump in or you're not. Do your homework, run your numbers and take action. You have to believe that you know what to do. In other words, 'you got this.'